Singapore HDB’s new Lease Buyback Scheme to benefit 25,000 elderly households

Singapore HDB’s new Lease Buyback Scheme to benefit 25,000 elderly households

By Wong Siew Ying,
SINGAPORE : Some 25,000 households, or 70 per cent, of two- and three-room flat owners will benefit from HDB’s new Lease Buyback Scheme.

Under this scheme, the Housing Board will buy back the tail end of the flat lease from elderly owners, to help them unlock the value from their flat.

Details were announced by National Development Minister Mah Bow Tan in his speech

Low income elderly households can sign up for the Lease Buyback Scheme to monetise their flat to meet retirement needs.

Under the scheme, those above 62-years-old can sell the tail end of their flat’s lease back to the HDB at market rate.

The household can continue to stay in their flat, which will be left with a 30-year lease.

Mr Mah said: “In addition to the housing equity that is unlocked by this purchase of the tail end of the lease, HDB will provide a S$10,000 subsidy. Out of this S$10,000 subsidy, S$5,000 will be given to the household as an upfront lump sum payment. The remainder will then be used to purchase a CPF LIFE Plan to provide the owner with a steady stream of income for life.”

For instance, a household living in a three-room flat with a 70-year lease valued at S$200,000 can expect to pocket S$97,000.

The sum will include S$87,000 for 40 years of their flat’s lease, after factoring in depreciation and a S$10,000 government subsidy.

Of this, S$92,000 go to the purchase of the CPF LIFE Plan and S$5,000 will be paid out to the household in cash.

Using the same illustration, the CPF LIFE Plan will yield a monthly payout of between S$460 and S$490 for the household for the rest of their life.

However, the annuity terms will vary depending on the age and gender of the owners.

And should the elderly outlive the 30-year lease, HDB says they can choose to have it extended.

Appropriate housing arrangement will also be made on a case-by-case basis for those who cannot pay for the lease extension.

Those who opt for the Lease Buyback Scheme will not be allowed to sell the flat in the resale market, nor sublet the entire flat.

However, they may return their lease prematurely to the HDB under special circumstances, such as the relocation of the owner to an institutional home.

The HDB will then reimburse the residual value of the lease.

To prevent abuse of the scheme, HDB will impose a pro-rated forfeit of the S$10,000 subsidy, if the flat is returned within the first five years.

The Scheme will be introduced next year.

Only elderly households in 3-room or smaller flat, who earns up to S$3,000 a month are eligible.

And they must not have enjoyed more than one housing subsidy or owned a larger flat or private residential property previously.

To be eligible, the household must also have lived in the flat for at least five years and not have any outstanding loan on their flat exceeding S$5,000.

Mr Mah says HDB will assess if the scheme should be extended to 4-room flat households. - CNA/ch
Source : Channel NewsAsia  - 29 Feb 2008

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Singapore Mah Bow Tan says acquisition of flat is “absolute last resort”

Singapore Mah Bow Tan says acquisition of flat is “absolute last resort”

By Julia Ng,
 

SINGAPORE: National Development Minister Mah Bow Tan assured Singaporeans in Parliament on Thursday that compulsory acquisition of a HDB flat is the “absolute last resort” – a serious decision carried out only after all other measures have been exhausted.

Mr Mah said this when he gave what he called “the full picture of Madam Judy Mitchell” – whose plight was highlighted by her MP Ong Kian Min of Tampines GRC earlier this week.

The five-room flat Judy lives in with her mother and her daughter, an air-stewardess, is her third flat.

Mr Mah said she had bought and sold two flats previously, making profits of about S$190,000. She has also enjoyed three concessionary loans.

But Judy had difficulties servicing the loan for her third flat soon after buying it.

HDB has allowed her to defer her mortgage payments or pay only half the instalment amount on four occasions for six months each, over a period of two years.

But Mr Mah said Judy did not make any attempts to find a long-term solution.

He said: “She was not receptive to HDB’s suggestions to downgrade or include her working daughter to help to service the housing loan. As a result, her outstanding loan has increased beyond the original loan. They have to downgrade, while they can still obtain enough sales proceeds to afford a small flat.

“I would like to urge Mr Ong to persuade the family to please do the right thing quickly. If they cannot get a bank loan, I will ask HDB to consider providing a non-concessionary HDB loan for them.”
- CNA/so

Source : Channel NewsAsia  - 29 Feb 2008

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More office space with new extension in Singapore Marina Bay

More office space with new extension in Singapore Marina Bay

By Wong Siew Ying,  

  
SINGAPORE: National Development Minister Mah Bow Tan said in Parliament on Thursday that the government has set aside a new growth area in Marina Bay. This will yield an estimated 2.8 million sqm of gross floor area for office use.

Marina Bay – a centrepiece of efforts to ensure there is sufficient office space to meet future needs – will be a seamless extension of the current Central Business District at Raffles Place.

At 85 hectares, the new growth area will be more than twice the size of Raffles Place, which now spans 31 hectares.

About 40 percent of the available office space has already been taken up by developments such as One Raffles Quay, the Marina Bay Financial Centre and white sites at Marina View.

Mr Mah said: “To give you an idea of its eventual scale, the amount of space that will be generated within the area located immediately adjacent to the existing financial district at Raffles Place and Shenton Way will be equivalent to two Canary Wharfs in London.

“It will provide as much Grade A office space as Hong Kong’s Central. URA will make available more sites for development in this area over the next five to six years, in line with market demand.”

More land will also be released around Tanjong Pagar, as well as redevelopment plans for the Ophir and Rochor area to transform it into a vibrant office cluster.

Mr Mah said the office market will remain tight until 2009. But some 1.4 million sqm of office space should become available in 2010 and beyond.

To ease the supply crunch, the government will continue to release land for transitional office sites.

The office developments at Scotts and Anthony Roads – two parcels on short-term leases of 15 years – could be completed by mid-2009.

These transitional office land parcels will join three others awarded previously at Scotts Road, Tampines Avenue 5 and Mountbatten Road.
- CNA/so
Source : Channel NewsAsia  - 29 Feb 2008

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Singapore CDL able to weather uncertainty for next 3 yrs

Singapore CDL able to weather uncertainty for next 3 yrs

It posts full-year profit of $725m; bottom line would be $2.8b if fair value gains included
By KALPANA RASHIWALA

THE top brass at City Developments Ltd (CDL) yesterday said the property group has ‘the financial muscle to weather the current period of uncertainty even for the next three years’, after announcing a record full-year net profit of $725 million.
 
Attractive asset: City Square Mall 
The group sold about $6.2 billion of residential projects in 2006 and 2007, which means it has locked in, to a very large extent, handsome profits which have yet to be booked.

These substantial and better-than-expected profits will continue to be recognised progressively based on construction progress. ‘Some will come in 2008, 2009, perhaps also into 2010,’ CDL managing director Kwek Leng Joo said at the group’s results briefing yesterday.

‘Even if the market recovery should take place a little bit later than expected, I think we’ll be OK,’ he added.

In short, the group can afford to delay launches of new residential projects if necessary to ride out the current weak sentiment.

As a major office landlord, CDL will also benefit from the office crunch as many of its key tenant leases are up for renewal between now and 2011 - a period when office supply is expected to be limited.

In the hospitality sector, CDL’s hotel arm Millennium & Copthorne Hotels has a string of hotels with a wide geographical spread - which should act as ‘an insurance against a downturn in any particular geographical area’, CDL executive chairman Kwek Leng Beng said.

The group also has many other attractive assets such as City Square Mall and St Regis Hotel in Singapore which it could potentially sell, boosting its bottom line.

As well, CDL has a healthy balance sheet, with relatively low net gearing of 48 per cent.

CDL posted a 106 per cent jump in group net profit for the year ended Dec 31, to a record $725 million. However, had it adopted the revaluation policy of its peers, its bottom line would have surged to $2.84 billion after factoring in about $2.1 billion of fair value gains on investment properties.

The $2.84 billion net earnings for the year ended Dec 31 would pip the $2.76 billion net profit posted by fellow property giant CapitaLand for the same period.

CDL’s fourth-quarter net profit rose about 71 per cent year-on-year to $235 million, with revenue inching up 3.7 per cent to $765.7 million.

The group has also yet to recognise any profits for One Shenton, The Solitaire, Cliveden at Grange and Wilkie Studio, as these residential projects are still in the initial stage of construction. These projects alone account for $1.7 billion in sales value.

Even if the group defers or paces its launches, it will proceed with the construction of its projects where construction cost had been favourably secured earlier, CDL said.

It may also consider building selected projects when the construction cost stabilises at a reasonable level. It expects that when sentiment improves and the market begins to recover, there will be pent-up demand which the group will be in a position to meet.

The group is planning to launch in the first half of this year some 427 private homes in four Singapore projects - Shelford Suites, a condo on the former Lock Cho Apartments site at Thomson Road, The Quayside Isle @ Sentosa Cove and a condo at Pasir Ris.

In its results statement, CDL also said that it has an investment commitment in the private fund Real Estate Capital Asia Partners, which acquired Jungceylon complex at Phuket’s Patong Beach. This is a 1.5 million sq ft mall which opened for business recently and is next to the Millennium Resort Patong Phuket.

CDL also reckons it has ‘ample time’ to review its strategy for its office portfolio, given improving office rental yields.

Its options include retaining its office properties at a low cost base, monetising the portfolio and/or extracting maximum value by selling its assets wholesale or individually. Another option would be to spin off an office real estate investment trust.

The group has all along been following its conservative policy of stating investment properties at cost less accumulated depreciation and impairment losses. On adoption of Financial Reporting Standard FRS 40, the group continues to state these assets at cost less accumulated depreciation and impairment losses.

Most other Singapore- listed property groups state investment properties at fair value, as permitted by FRS 40.

CDL’s full-year revenue for the year ended Dec 31, 2007, rose 22 per cent to $3.1 billion, also a record for the group.

The group also gave a segmental breakdown of profit before tax, including share of after-tax profit of associates and jointly controlled entities, which showed that pre-tax from property development more than doubled from $225.8 million in 2006 to $506.3 million in 2007.

Pre-tax profit from hotel operations fell from $396.6 million in 2006 to $285.4 million in 2007, mainly because the 2006 figure had included a $150.9 million one-off gain from the sale of long leasehold interests in four Singapore hotels to CDL Hospitality Trusts.

Profit before tax from rental properties more than quadrupled from $30 million in 2006 to $133.6 million in 2007.

CDL is proposing a final dividend of 7.5 cents per share as well as a special final dividend of 12.5 cents per share. Both payouts are tax exempt.
Source : Business Times  - 29 Feb 2008

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CDL boss punctures popular wisdom - Singapore

CDL boss punctures popular wisdom - Singapore

Mid-market may not shine and high-end is unlikely to collapse, he says
By KALPANA RASHIWALA

(SINGAPORE) City Developments Ltd (CDL) executive chairman Kwek Leng Beng yesterday turned a popular market view of the Singapore residential sector on its head.
 
Different view: Mr Kwek Leng Beng (right) with his brother Leng Joo, MD of City Developments. The group’s full-year profit doubled to a record $725m last year 
Many have whispered that the high-end residential segment is in danger of being hardest hit by the sub-prime crisis while the mid-tier and mass-market segments will be better shielded. Not true, says Mr Kwek.

‘The high-end is not going to collapse like what some (in the market) are saying. The mid-end is not going to be fantastic, like what is commonly believed, because of the subprime situation and Singaporeans’ wait-and-see attitude.

‘The mass market will do well, but selectively. It’s not going to be what you’ve seen before…people queuing up,’ Mr Kwek said.

The Housing & Development Board also provides a credible alternative to mass-market private housing, Mr Kwek said at a media and analysts’ briefing to announce CDL’s results for the year ended Dec 31, 2007. The group’s full-year net profit doubled to $725 million - a record.
‘Sentiment is more important than supply and demand. The higher the prices, the more people buy.’
 
- Mr Kwek Leng Beng 
 
 
 
 
Mr Kwek also acknowledged that the current market environment was not conducive to setting up real estate investment trusts (Reits). He would look into opportunities to buy into existing Reits, but only if they were being offered for sale together with their respective Reit management companies, which earn handsome fees.

On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. ‘Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

‘With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,’ CDL said in its results statement.

The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. ‘It will be a different Singapore altogether. Singapore is a hub. I’ve been harping on this. Nobody believed me until last year,’ said Mr Kwek.

He also sought to debunk another popular view, that the deferred payment scheme which was removed by the authorities in October last year, had only served to fuel property speculation. ‘Deferred payment is not only an instrument for speculation. It is an instrument to enable buyers of new (residential) units to dispose of their existing units at a gradual pace, instead of being forced to sell their existing homes,’ he said.

Noting that sentiment in the local property market has become subdued because of the sub-prime issue, Mr Kwek said: ‘Sentiment is more important than supply and demand. The higher the prices, the more people buy.’

He also recommended buying real estate as a hedge against inflation, especially given the current low housing loan rate environment, adding in the same breath that he was not trying to talk up the market - drawing laughter from the audience.

But Mr Kwek also had some advice on affordability. ‘You must be able to pay your instalment, that is most important. If you can’t pay the instalment, and you hope (the property value) will go up tomorrow, then you are speculating.’

Referring to the squabbles among owners in estates with en bloc sales, Mr Kwek said: ‘People are fighting, because they are jealous somebody sold higher. Who can say this is the peak? You should be happy if you have a good gain, don’t fight. That’s my advice.’

He estimates that about 50 per cent of those who’ve sold their homes through en bloc sales have not yet bought replacement homes, even if they may want to downgrade.
Source : Business Times  - 29 Feb 2008

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So easy for winner of $1.3b govt outsourcing deal-Singapore

So easy for winner of $1.3b govt outsourcing deal-Singapore

EDS-led team clinches contract that could save govt $500m over 8 years
By AMIT ROY CHOUDHURY

(SINGAPORE) The government yesterday ended the suspense over its mega outsourcing deal and announced that the One Meridian consortium, led by IT services company EDS International, has won the eight-year contract to manage the public sector’s front-end computer network comprising around 60,000 computers.
The $1.3 billion, eight-year tender, called Standard Operating Environment (SOE) - and renamed SOEasy (Public Sector) - was awarded some three years after the idea was first announced.

One Meridian’s proposal was the best and that’s why it emerged the winner, Lim Hup Seng, deputy secretary (performance) of the Ministry of Finance, noted yesterday.

The One Meridian consortium comprises, apart from EDS, Singapore Computer Systems (SCS), Frontline Technologies, Fuji Xerox, Avanade, Alcatel-Lucent, Cisco, Microsoft and Singapore Telecommunications (SingTel).

Its victory startled some industry watchers who had installed two other consortia as favourites to bag the SOE deal.

One Team, led by NCS and including IBM, and iN’spire, led by Hewlett-Packard (HP) and including local firm ST Electronics, were widely thought to be in the best position to win. This was mainly on account of the fact that HP and IBM are two of the biggest IT companies in the world. BT had reported earlier this week that some internal differences had cropped up in the One Team consortium.
 
Mr Lim said that the initiative would bring about $500 million in cost savings for the government over the lifetime of the project.

He added that the tender would run for eight years and the first 17 government agencies with full SOE implementation will be up and running by July 1, 2009. Full implementation would be by 2010.

Once deployed the SOE would serve 60,000 public officers and would cover 74 government agencies with offices in more than 800 locations.

The SOE contract excludes the Ministry of Defence, polytechnics and Institutes of Technical Education as well as all schools under the Ministry of Education.

The race to clinch the deal - NexGenea, comprising Japanese giant NEC and US-based Computer Science Corporation, was the other player in the fray - was closely watched by the IT industry globally.

This is because for the first time the front-end computer network, across different departments and ministries of a government, is being outsourced to an outside vendor. If successful, SOE could trigger copycat implementations across the world, according to industry watchers.

Mr Lim pointed out that SOE was just the start of the government’s efforts to outsource its front-end IT needs.

One initiative that is already in the planning stage is the 100,000-seat Ministry of Education project for all the schools under it. Preliminary evaluation on this has started.

Pauline Tan, senior director, government chief information office, and the SOE programme director, said the contract will consolidate infocomm services into a single environment which will allow government agencies to achieve greater efficiency in infocomm usage and cost savings.

‘This involves harmonising desktop, messaging and network environments across all government agencies,’ she said.

She added that agencies can then fully utilise and benefit from integrated infocomm services and allocate resources optimally, resulting in operational efficiency that will bring about the $500 million cost savings to the government over the eight-year period of the contract.

‘This translates to an average of 28 per cent over current infocomm expenditure for equivalent services,’ she said.

Stephen Yeo, EDS’ South-east Asia executive director, noted that the One Meridian consortium represents ‘a comprehensive, leading-edge approach that will help create an agile work environment across the entire breadth of the Singapore government’.

Mr Yeo also noted that the project is economically viable. ‘If we didn’t think so, we wouldn’t be on this … and I think to the government’s credit, it knows that this has to be economically viable for whoever is going to win.’
Source : Business Times  - 29 Feb 2008

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Property players sweat over lending squeeze - Singapore

Property players sweat over lending squeeze - Singapore

Banks batten down hatches amid global turmoil and as big deals suck liquidity
By KALPANA RASHIWALA AND SIOW LI SEN

(SINGAPORE) The squeeze is on. Banks have tightened financing for property investment deals, which include big transactions like sales of office blocks and development sites. This, in turn, may keep some buyers from participating in the market, industry players have told BT.
 
‘There are a couple of large deals such as the integrated resorts which have soaked up a fair bit of liquidity.’
 
- Tan Teck Long, 
DBS Bank managing director, corporate and investment banking 
 
 
 
It’s also taking longer to wrap up property sales deals these days as securing funding becomes more of an issue - and this could be a drag on investment sales.

Bankers cite two main causes for the tightening. The turmoil in the global financial market has led to increased awareness of risks all round, and several mega transactions in the past 12 months here have left less liquidity available for others.

Says Tan Teck Long, DBS Bank managing director, corporate and investment banking: ‘There are a couple of large deals such as the integrated resorts (IRs) which have soaked up a fair bit of liquidity.’

Yesterday, Las Vegas Sands Corp announced the completion of its $5.25 billion loan syndication for the Marina Bay Sands IR, the largest deal of its kind here.

Brad Nelson, global head of commercial real estate, Standard Chartered Bank, agrees that the big deals had been sucking liquidity out of the market. ‘Banks only have a certain amount of capital base,’ he points out.
 
Banks’ exposure to property-related loans is capped by law at 35 per cent of their total loans, to keep risks from the industry in check. This does not include mortgages for owner-occupied properties.

Meanwhile, banks have become more cautious and are giving smaller loans relative to a property’s valuation than, say, 12 months ago. This serves to provide them with a greater buffer in the event of a fall in property values given the weaker sentiment in the Singapore property market today.

Jones Lang LaSalle regional director and head of investments Lui Seng Fatt says that about a year ago, banks may have given loans of up to 75 per cent of valuation for income-producing assets like office blocks. Today, the figure may be closer to 60-65 per cent.

Things are even harder for relatively unseasoned, smaller players buying residential development sites. They face greater scrutiny these days before banks give them loans, BT understands.

‘Financing for real estate projects has definitely tightened, especially since last quarter. This is essentially because of tighter liquidity brought about by limited appetite in the capital markets, due to current market developments,’ says Paul Kwee, Citigroup Singapore corporate bank director and head of real estate.

Lending amounts are more conservative now and covenants tighter, he says.

And despite the decline in Singapore dollar interest rates, the margins that are added to the floating interest rate reference are wider today, observes Mr Kwee. Margins are wider by 50-100 basis points now compared to last year, say bankers. Property sources say that while big established developers can still secure financing for purchases of development sites with relative ease, things are less rosy for smaller players.

Maybank head of business banking Lee Hong Khim acknowledges that his bank hesitates to finance new players whose core business is not in property development.

Mr Lee adds that Maybank is ‘more selective in the projects we finance; the location of the project is an important consideration as well’.

Giving his take, Citi’s Mr Kwee says: ‘Smaller players may find it harder because they have fewer financing options available to them as compared to the big boys who may also be able to tap the convertible bond or Sing-dollar bond market, for instance.’

But Mr Nelson of Stanchart says that ‘when liquidity is tight, lenders will normally take the position of supporting their existing relationships . . . regardless of whether they are SME (small and medium enterprise) or wholesale customers’.

Another outcome of banks becoming more cautious in evaluating loan applications is that it’s taking longer to complete property investment sales deals, says JLL’s Mr Lui.

The investment head of another major property consultancy group feels that the tighter financing environment could change the profile of institutional property buyers. ‘We may see greater participation from core funds, which assume lower risk, lower returns, and lower debt, and less participation from opportunity funds, which assume higher risks, higher returns and higher debt.’

Market watchers point to an extreme recent example, when UK-based New Star International Property Fund made a pure-cash (zero debt) acquisition of One Phillip Street, an office block in the Raffles Place area, for $99.02 million.

Funds that need to assume higher leverage to achieve their investment returns may find it difficult to buy property assets in Singapore - and their numbers may dwindle.
Source : Business Times  - 29 Feb 2008

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Singapore URA launches 2 more temp office sites in Newton

Singapore URA launches 2 more temp office sites in Newton 

Analysts see good demand just like for a nearby plot launched earlier

By Ong Bi Hui 
 
TWO more transitional office sites have been launched by the Urban Redevelopment Authority (URA) in a move to help ease some of the pressure on space.
The adjacent sites - parcel A is 8,682.8 sq m in size and parcel B is 9,037.9 sq m - are near the Newton MRT station, between Scotts Road and Anthony Road.

The sites can accommodate developments of up to four storeys that can be built within a year.

Transitional office sites, a relatively new concept, were introduced as a quick fix to the lack of space in the Central Business District (CBD).

They have 15-year leases, significantly less than the usual 99-year leases for commercial buildings.

The response has been mixed. A plot launched by the URA in Aljunied recently flopped, with all bids rejected as being too low.
The URA believes the Newton sites will fare better.

‘Based on market feedback, there is still demand for transitional office sites in the city centre,’ it said.

Property experts also expect a more enthusiastic response.

Mr Nicholas Mak, Knight Frank’s head of research and consultancy, said the prime location near the CBD and Newton MRT would draw bidders.

And the sites being adjacent means a developer could combine the land.

‘There is a potential for amalgamation to create bigger floor space,’ added Mr Mak, who estimated that the sites could sell for around $100 to $130 per sq ft (psf).

This values the parcels from $14 million to $19 million each.

Mr Mak felt the Aljunied site was ‘too close to the red-light district of Geylang’.

For the two latest plots, the industry experts interviewed expect a level of response similar to the Scotts Spazio site, which is across the road and was eagerly received by developers.

KOP Capital is developing the site, which cost $37 million, with partners Hwa Hong Group and Dubai Investment Group.

Insurer Prudential will lease the four-storey building for 14 years, paying $6.50 psf a month. The company should move in by September.

However, some experts believe that transitional office sites will not be commercially viable given their brief tenure. Tenders for the two Newton sites close on April 24 for parcel A and April 30 for parcel B.

Source : Straits Times  - 29 Feb 2008

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CDL boss prepared to delay Singapore launches in subdued market

CDL boss prepared to delay Singapore launches in subdued market 

Some projects can be held off till 2009, he says, as full-year gain swells to $725m

By Fiona Chan, Property Reporter 
THE property market may have stalled for now, but City Developments (CDL) executive chairman Kwek Leng Beng is not too worried.
He said that if necessary, he can hold off launches of new developments until next year.

‘Rather than launch today when the market is subdued, I would rather start construction on some projects first’ and launch them when demand picks up, Mr Kwek said yesterday.

‘If today there are not many buyers, this means that pent-up demand is building up, which can be very powerful.’

CDL plans to launch more than 400 units in four projects by June, assuming market conditions do not worsen.

It will release the 77 units at Shelford Suites in Bukit Timah, which is said to have been ready for launch for some time.

LATENT DEMAND
‘If today there are not many buyers, this means that pent-up demand is building up, which can be very powerful.’
MR KWEK, on why he would rather begin construction on some projects, and launch them later on when demand picked up
 
The group also intends to launch 100 units of the 228-unit Quayside Isle @ Sentosa Cove, and another 100 at a new development on the former Lock Cho Apartments in Thomson Road, which will have 336 units.

The fourth project is a joint venture at Pasir Ris Drive 1. About 150 of its 724 units are targeted for release by June.

Even if the launches end up delayed, CDL may first start construction on Shelford Suites and the Thomson Road project, said Mr Kwek.

This could also bring in more upfront cash for the group when it does sell the homes. Buyers have to pay 30 per cent in cash after foundation work is done, compared with only 20 per cent if no construction has started.

Mr Kwek’s comments yesterday came on the back of a sterling year for CDL last year.

The developer, Singapore’s second-largest, said full-year net profit more than doubled to a record $725 million. Revenue rose 22 per cent to $3.11 billion.

Earnings per share more than doubled to 78.3 cents for the year. Net asset value per share rose to $5.72 as at Dec 31, from $5.21 a year ago.

Last year, CDL booked profits from projects such as St Regis Residences, Tribeca and The Sail @ Marina Bay.

But it has yet to recognise any profits from One Shenton, The Solitaire, Cliveden at Grange and Wilkie Studio - which account for about $1.7 billion of sales. In all, the group sold 1,655 homes last year for a record $3.4 billion.

CDL’s hotel and office properties are also enjoying high occupancy rates in the buoyant market. Its offices are almost 96 per cent occupied, compared with a market average of 92 per cent.

The group has also not adopted the same approach to revaluing its properties as some of its competitors, which have reported huge revaluation gains. With these gains, its profit would have surged to $2.8 billion, it said.

The group is recommending a final cash dividend, tax-exempt, of 20 cents a share in total.
 

Source : Straits Times  - 29 Feb 2008

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$5.25b credit facility for Singapore Marina Bay Sands

$5.25b credit facility for Singapore Marina Bay Sands 
 
DESPITE volatile global credit markets, another giant syndicated loan deal has been completed in Singapore.
The deal is a $5.25 billion credit facility to finance the construction of the Marina Bay Sands integrated resort (IR).

It follows Genting International’s success earlier this month in lining up funding of $4.19 billion for much of the building of its Sentosa IR.

Las Vegas Sands Corp’s senior vice-president for finance, Mr Scott Henry, was in town yesterday for the announcement of the Marina Bay Sands deal, allowing him to meet executives from the participating banks.

More than 30 banks, including Goldman Sachs, Standard Chartered Bank, Lehman Brothers Finance Asia and the three local banks, are involved as coordinators of the financing.

The credit facility is the largest private Singapore dollar-denominated financing ever completed.

Mr Henry said the completion of the credit facility underscores both the attractiveness of the Singapore market, and the enthusiasm and confidence the financial community has in the success of the IR.

Participating banks said the response to the credit facility had been encouraging, especially in the light of the turmoil in credit markets.

‘This demonstrates the participating banks’ confidence in Singapore and the Marina Bay Sands project,’ said Mr Elbert Pattijn, the head of specialised corporate and investment banking at DBS Group Holdings.

Source : Straits Times  - 29 Feb 2008

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EDS-led group wins $1.3b Singapore govt IT contract

EDS-led group wins $1.3b Singapore govt IT contract 

oneMeridian will set up standard computer systems for civil servants

By Grace Chng, Deputy News Editor 
WINNERS: oneMeridian, led by Mr Yeo (foreground), trumped the hot favourite - the ST Electronics and Hewlett-Packard team - to win the biggest IT deal outsourced by the Government. — ST PHOTO: DESMOND WEE
 
A CONSORTIUM led by global technology firm EDS International has won a $1.3 billion deal to put standard computer systems on the desks of about 60,000 public sector workers here by 2010.
The EDS-led group, oneMeridian, trumped the hot favourite - the Singapore Technologies (ST) Electronics and Hewlett-Packard team - and the other consortia: NCS- IBM and NEC Solutions Asia- Pacific-CSC Computer Systems.

Locally-listed Singapore Computer Systems (SCS) is the key local partner for the winning group, which also includes Alcatel-Lucent, Cisco Systems, Microsoft and Avanade.

The eight-year contract - first announced in April 2005 - will streamline government IT purchasing by grouping about 200 public sector contracts into a single deal to benefit from bulk discounts.

This will yield about 28 per cent in savings over current spending for similar services.

The EDS-led team snagged the prize because it offered the best technical benefits and price, said Ms Pauline Tan, senior director of Infocomm Development Authority of Singapore (IDA) and the Government’s point person driving this project.
The Standard ICT Operating Environment (SOEasy) is the biggest-ever infocommunications technology (ICT) deal outsourced by the Government. Singapore will be the first government in the world to implement a public sector- wide standard operating environment.

Once it is up and running, public servants will use common brands of PCs or laptops and the same software to send e-mail, surf the Internet and create office documents.

They will also be able to share their work in real time with colleagues and use technologies like video conferencing for communications.

The public will be able to get government information at any time. For example, when a government data centre caught fire last year, access to information was lost until the centre came online again a few days later. ‘With SOEasy, there’ll be a back-up data centre, and access to information will always be available,’said Ms Tan.

The EDS-led consortium’s first priority will be to get the key people ready to run the project. Experts from EDS’ global offices are already coming to Singapore. At its peak, the consortium expects to have about 850 staff, mostly newly hired engineers.

An elated Mr Stephen Yeo, EDS’ vice-president for Southeast Asia, said: ‘The different teams in the consortium have rehearsed how they want to implement the project, so we’re ready to go.’

The IDA, the Ministry of Information, Communications and the Arts and the Ministry of Finance will be among the first 17 agencies to go live with SOEasy by mid-2009.

All 74 government agencies will switch to SOEasy by 2010 except for the Defence Ministry, the Defence Science and Technology Agency - which have their own systems - schools and tertiary institutions. These will call for a tender for their version of SOEasy in the next two years.

Mr Tan Tong Hai, SCS president and chief executive, said yesterday that SOEasy ‘will help us learn about programme management for a project of this size and scope, a skill that will help us win future business’.

 Common standard
Standard ICT Operating Environment (SOEasy)

First announced:
April 2005
Size of contract:
$1.3 billion (up to $1.5 billion if there is customisation work)
Length of contract:
Eight years
Users: 60,000 civil servants in 74 government agencies

Expected savings:
28 per cent of operating costs or $500 million over eight years
First live SOEasy site: Mid-2009
Completion: By 2010
Project’s tender award delayed from October 2007 to February 2008

Largest public sector information technology project

Effort by Government to standardise desktop computing system is a world first
Source : Straits Times  - 29 Feb 2008

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Singapore will be ‘important node’ in Arab network

Singapore will be ‘important node’ in Arab network 
 
SINGAPORE has always been an ‘important node’ in the international Arab network, and Foreign Minister George Yeo is confident that the country will become one again in the 21st century.
With the Middle East fast becoming a ‘new frontier’ for Singapore, he told the House yesterday that the region is ‘full of opportunities, though not without risks’.

In the last few years, relations between Singapore and the Arab nations have seen a ’sea change’ and high-level bilateral visits are so common, it is happening almost every month.

Mr Yeo was responding to Dr Mohamad Maliki Osman and Mr Hawazi Daipi (both Sembawang GRC), who asked about Singapore’s ties with the Middle East.

Relations with the six countries of the Gulf Cooperation Council (GCC) have been stepped up, said Mr Yeo, and negotiations on a free-trade agreement between Singapore and the GCC were successfully concluded last month.

The GCC members are Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.

It is estimated that about 35 million people live in these GCC states.

Beyond the GCC, Singapore’s ties with Libya have also ‘begun to flower’, said Mr Yeo, since the establishment of relations last year.

Senior Minister Goh Chok Tong will be making an official visit to Libyan capital, Tripoli, later this year.

Mr Yeo also revealed that Shell’s Singapore chairman Lee Tzu Yang has been appointed to chair the new Middle East Institute. An international search for a director is ongoing.

Source : Straits Times  - 29 Feb 2008

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Why income cap for Singapore HDB buyers won’t be raised

Why income cap for Singapore HDB buyers won’t be raised 

By Lynn Lee 
 
THE Housing Board will not raise the $8,000 income ceiling for first-time buyers of HDB flats, despite numerous calls from MPs and the public for it to do so.
The reason: The income criteria capture some eight in 10 Singaporean families, including upper middle-income earners, said National Development Minister Mah Bow Tan yesterday.

‘I hope Members will agree with me this is more than generous and will not be surprised if I tell them HDB has no plans to revise the income ceiling,’ he added.

His reply during the debate on his ministry’s budget was sparked by calls from MPs such as Mr Christopher de Souza (Holland-Bukit Timah GRC) during the debate earlier in the week on the Finance Minister’s Budget statement.

Mr de Souza said buyers, especially young couples, had no access to affordable housing if they earned more than $8,000.

Mr Mah acknowledged HDB resale prices saw ‘heady’ growth of about 17 per cent last year. But he did not expect the spike to continue.

There are other affordable alternatives for such couples, he said, citing the resale market in executive flats.

Mr Mah also assured Singaporeans that the Government will ensure HDB flats remain within reach of the vast majority, especially young couples seeking to buy their first home. For instance, they will get more chances in balloting exercises for new flats.

On average, the Government spent $1.4 billion a year over the last five years on public housing. In the coming 2008 financial year, it has set aside $1.6 billion.

The vast sums are spent on providing Singaporeans with various housing types to meet changing aspiration and various needs, said Mr Mah as he detailed HDB plans, policies and programmes.

Affordable housing

NEW HDB flats are priced below market value. And the subsidy for first-time buyers can go up to $88,000.

As a result, first-time home owners last year used, on average, only 20 per cent of their monthly income to pay their home loan.

This is well within the 30 per cent benchmark for affordability.

Also, at least 70 per cent do not fork out cash from their pockets each month but settle their mortgage entirely with their CPF contributions.

Many choices

THREE more sites will be offered to private developers to build condo-style flats, under HDB’s Design, Build and Sell scheme.

It will bring the total of such HDB flats to around 4,000 units, to cater to families who can afford to pay more.

But Mr Mah stressed that HDB-built flats will still be the mainstay of new flat supply.

Sufficient supply

ABOUT 700 new flats in Punggol and Sengkang are still available for purchase, said Mr Mah, who allayed concerns over whether supply is enough to meet growing demand.

HDB builds flats only if buyers show firm commitment, in the form of a deposit. It started the practice following a glut of unsold flats in the 1990s.

This build-to-order scheme has not reduced supply. Some 10,500 flats have been launched since last year, and HDB will continue to do more of such projects.

Mr Mah also assured the House that getting a new flat was not a case of tikam-tikam (’trying your luck’), a phrase Mr Baey Yam Keng (Tanjong Pagar GRC) used of couples who came to see him when they could not get flats.

Mr Mah said his checks with HDB showed in the past six years, only 250 were still unsuccessful after taking part in more than four HDB sales exercises. ‘This is less than 1 per cent of first-timer applicants applying for a new HDB flat,’ he said. Also, four out of five of the 250 applied only for homes in established towns.

Such outcomes, Mr Mah said, are why he repeatedly advises young couples to be flexible and go for new flats in newer towns or resale flats.
Source : Straits Times  - 29 Feb 2008

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Three-pronged strategy to resolve Singapore rental flat shortage

Three-pronged strategy to resolve Singapore rental flat shortage 

A review of the public rental scheme will also be carried out to ensure more holistic assessment criteria

By Jessica Cheam 
 
THE Government has unveiled a three-pronged strategy to tackle rising demand for public housing rental flats.
National Development Minister Mah Bow Tan yesterday said he has asked the Housing Board to resolve the shortage in three ways.

One is to increase flat supply. Secondly, the eligibility criteria for rental flats will be reviewed; and thirdly, enforcement will be stepped up to weed out those who abuse the rules on use of flats.

To address stronger demand, the stock of rental flats will go up by 20 per cent to 50,000 over the next few years, said Mr Mah. Since 2006, when building for rental flats resumed, some 2,200 new units have been built.

Another 930 rental flats converted from vacant blocks will also be ready by next month.

This year, another 2,000 units will be built across different estates, and ready for families to move in from 2011.

WEEDING OUT THOSE WHO ABUSE RULES
‘HDB will not hesitate to terminate the flat tenancy of those who abuse or violate the conditions of the lease.’
NATIONAL DEVELOPMENT MINISTER MAH BOW TAN, responding to MPs who shared anecdotes of tenants installing air-conditioning units or sub-letting their rental flats
 
Mr Mah was responding to calls by some MPs to review the policy on rental flats.

Ms Irene Ng (Tampines GRC) questioned whether the current 5 per cent of total housing stock for rental was sufficient. She also called for rules on rental flats to be relaxed ’so that Singaporeans have more access to them’.

Mr Mah disclosed that a ‘comprehensive review’ will be done on the public rental scheme.

‘This review will put in place more holistic assessment criteria of rental flat applicants,’ he said.

Mr Mah also noted that Singaporeans who can afford home ownership or have family support should not join the queue, otherwise, ‘the more needy cases will be crowded out’.

He referred to an example raised by Mr Masagos Zulkifli (Tampines GRC) of elderly residents who had no place to go after selling their flats and giving the proceeds to their children who subsequently refused to live with them.

‘Our rental flats cannot be used to support such irresponsible behaviour of the children,’ said Mr Mah.

Addressing another point raised by Ms Ng on low-income divorcee families who are increasingly turning to rental flats, Mr Mah said: ‘We have to look at the overall issue of low-income dysfunctional families from a wider perspective together with the Ministry of Community Development, Youth and Sports and other ministries. The issue cannot be just limited to housing.’

Among others, the review will also study how existing tenants can buy their own homes when their situation improves.

In reply to MPs who shared anecdotes of tenants installing air-conditioning units or sub-letting their rental flats, Mr Mah said that ‘HDB will not hesitate to terminate the flat tenancy of those who abuse or violate the conditions of the lease’, and will re-distribute these to the more deserving cases in the queue.

The Government will continue to be flexible to help families in financial hardship, added Mr Mah.

‘But the individual has to exercise prudence and financial responsibility.’

Source : Straits Times  - 29 Feb 2008

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Low: When will it be Hougang’s turn for Singapore HDB upgrading?

Low: When will it be Hougang’s turn for Singapore HDB upgrading? 

By Goh Chin Lian 
 
OPPOSITION MP Low Thia Khiang crossed swords with Minister of State (National Development) Grace Fu over the upgrading of HDB flats, especially those in his Hougang constituency.
Mr Low yesterday repeatedly pressed her for answers as to when his residents could benefit from upgrading and asked if they were being fairly treated.

He accused the Government of using upgrading as a political tool to change voting behaviour, and wanted to know how much it spent on upgrading flats in different precincts.

He also claimed that the Government ‘owes every eligible flat owner in Hougang constituency $22,500 to $27,000 for the long overdue upgrading’.

This is based on the average cost of $30,000 for a basic upgrading package, of which the Government pays the major portion and residents the rest.

It has been 12 years since he was told that Hougang’s turn for the Main Upgrading Programme (MUP) would not happen for ‘many, many years’, he said during the debate on the National Development Ministry’s budget.

Noting that the MUP has since been replaced by schemes such as the Home Improvement Programme (HIP), he asked: ‘Will opposition wards need to start all over again and wait many, many years for HIP to happen?’

Ms Fu said the HIP was the result of residents asking for more flexibility and consultation in upgrading.

The programme would benefit 300,000 flats across the island.

Explaining that the MUP was restructured so that flats could be spruced up more quickly, she said the change applied to PAP and non-PAP constituencies.

Mr Low had asked about the amount spent upgrading each flat and how these government funds would be applied fairly to everyone.

Responding, Ms Fu said the amount was about $30,000 a unit. But she told Mr Low that the question of fairness did not arise in this matter.

‘It is not a case of an entitlement. It does not mean that every Singapore household can come and claim for this sum of money,’ she said.

‘It is something that we will prioritise. It’s something that we will do depending on the age, the quality of the flats.’

And who gets HIP first also depends on the funds available.

The Government’s focus now is to have lifts stop at every floor of HDB blocks by 2014, she said.

‘And Hougang residents can look forward to that by 2014,’ she said, adding that Mr Low could speed the process up by having his town council undertake the upgrading of the lifts in his constituency.

Source : Straits Times  - 29 Feb 2008

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